asata 21st centuryfinal · 2018. 9. 19. · mitigate these so that travel is not only painless, it...

The

Travel Agents’ survival depends on their ability

and willingness to evolve…

THE PROBLEM?

TRAVEL AGENTS’Traditional Business ModelUNSUSTAINABLE

Changes in macro-economic environment…Stakeholder behaviour has changed…

Weakened attractiveness ofTRANSACTIONALBusiness Value Proposition

Emerging Trends in

TRAVEL Landscape

Use of MobileFlexibility

Personalisation Consumerisation

The Sharing Economy

Millennial Traveller Technological advancements

THE SOLUTION?21ST CENTURY TRAVEL AGENT STUDY 9 RECOMMENDATIONS

A Framework for Sustainable and Profitable Business Model for Travel Agents in South Africa

OUR FOCUSTRUE VALUEHowyouneedtoevolvetodeliverTRUEVALUEWHAT CUSTOMERS TRUST AND ARE WILLING TO PAY FOR…

HOW WE DID THE STUDY…

Desk Research

Online Surveys

One-on-oneInterviews

FocusGroups

WHAT WE LEARNT:CUSTOMERMUSTBEATTHEHEARTOFYOURBUSINESS…

Understand customers’ context, circumstances and needs to prove your future value

WHAT WE LEARNT:

PAIN POINTS

Understand my

Painless and Pleasant Travel

WHAT WE LEARNT:

ENTIRE LEISURE JOURNEY

Add value to

PREPARED TO PAYPROFESSIONALSERVICEButNOTcostinefficiencies…

We need to regain the customer’s trust by…

Focussing your business around understanding and meeting your

customer’s travel needs…

HAVE A CONVERSATION AT A DIFFERENT LEVELApply YOUR travel knowledge, experience, expertise and supplier relationships

Travel Agents in SA

RECOMMENDATIONS FOR BUSINESS AND LEISURE

CHANGE YOUR VALUE PROPOSITIONTo Survive Financially in future

“Technology will change the role of the travel management company

from transactor to a true manager of transactions. Bookings will be

made at various points and aggregated

by the TMC.”

TRANSACTIONALBOOKING VALUE REDUNDANTOnline Booking EnginesSupplier Direct StrategiesOnline Travel Inspiration

THIS LEADS TO…CommoditisationUnethical behaviourUndercutting ‘fair pricing’Pressure on profit margins

Customers’ and suppliers’ negotiating power has increased…

Lower commissions and refusal by customers to pay for a service they believe they can do for themselves.

JUSTIFY YOUR VALUEID services customers willing to pay for a PREMIUM serviceHelp travellers…Make the best choiceShorter period of timeLess purchase anxiety

Key TAKEAWAYS▪ Help travellers navigate the

plethora of online information to find a solution that meets their needs better in a shorter time.

• Justify your value by offering services customers are willing to pay a premium for.

• Stop pursuing sales on price only – it shows you are desperate and have no confidence in your expertise.

BECOME MORE CUSTOMERCENTRICAnd focus on services relevant to meeting customer priorities…

“Predispositions are our enemy. You cannot serve two masters: You either serve the client or your

agenda, and the latter alienates the former. This lack of integrity will force your clients to find another platform that offers integrity.”

PERCEPTION AMONG CUSTOMERS…

You serve the supplier not the

customer

This negatively impacts the

quality of service

Not evolving service to meet priority needs

Not paying attention to critical things to help you meet needs like training, technology, customer feedback, service quality,

innovation, marketing

your expertise, knowledge and value

The VALUE you providehas SHIFTED from the BOOKING EVENT to the…

The Booking event is a fait accompli in the TOTAL SERVICE PACKAGE

HELP YOUR CUSTOMER…improve their business performanceUnderstand their… contexts

Personal

Business

Economic

Lifecycle

TRAVEL IS PERSONALBalance travellers’ personal preferences

with Corporate business goals…

“Care enough about me that you know what my travel pain points are and dispel them so that my journey is seamless and pleasant.

That’s your Duty of Care…”

PAINLESS & PLEASANTBusiness travel is lonely, impersonal & stressful… AREYOUINTERESTED&AVAILABLE?…▪ Identify main ‘friction’ or

‘failure’ points in the travel journey

▪ Pre-empt travel issues▪ Inform where you cannot

change ▪ Reduce feelings of

uncertainty and helplessness

“Today’s travellers want unique experiences tailored to their priorities and want to take

control of their own itineraries. They expect to be seen as individuals and want to receive

information and offers built on their preferences, delivered in a timely manner to their device of choice. And with the advent of social media,

consumers are more transparent than ever so understanding them is now a

real expectation.”

IT’S ALL ABOUT PERSONALISATION…

Save yourself time. Time is money- get it right the first time.

You may have to leave your comfort zone for a day and meet a new person over the telephone.

But if you don’t start working SMART as opposed to HARD you will never move forward. Start saving time!

Spend it with your family or making more money.

Touching the customer 24/7Expert knowledge and adviceKnowing customers’ individual preferencesPersonal recommendations Enabling personal control over their itineraries

HOW TO DELIVER THIS?

“Travel agents need to have different conversations with their customers.

Conversations are no longer about: Where do you want to travel? Then booking a ticket...

The conversation has to be around: Why they are travelling… That is true partnership.”

Start collecting it, even if that’s all you do for now!Planning | Booking | Issuing

TRUE VALUE = MEETING PRIORITY NEEDSCost saving Business efficiencies Travel-Related Management Info Travel policy guidance

Compliance Safety and security

Use data to inform yourself about customers’ preferences and circumstances to inform policy, encourage compliance and

fulfil Duty of Care

Start collecting it, even if that’s all you do for now!

Key TAKEAWAYS▪ Know your customers’

circumstances and provide services to meet priorities.

▪ Identify the potential ‘pain points’ along the journey and mitigate these so that travel is not only painless, it is pleasant.

▪ Show genuine care, learn about their personal preferences and make travel pleasant.

▪ At a minimum, fulfil travellers’ general or basic operational travel requirements.

BUILD STRONG RELATIONSHIPSBased on trust and credibility…

Corporate travel managers and travellers want you to truly understand their contexts and requirements.

UNDERSTAND USCorporate travel managers and

travellers want you to help them be successful in their business or to have

a great experience

WHAT WE LEARNT:

OPPORTUNITY

CorporateTravelManager:Company’sinterestsatheart

Build a positive relationship = concierge –style service

“Their perception is that if TMCs could offer a good quality service that meets the needs

of their company and them as travellers, there would be no need for a corporate travel

manager separate from the normal procurement function.”

The business traveller becoming the TMC’s strongest advocate to the TMC’s corporate customers.

WHAT WE LEARNT:

STRONGCLOSE RELATIONSHIPBased on trust and credibility

Get to know their likes, dislikes, look after them throughout the travel journey – Differentiate your service proposition

NEED IS FOR…unique travel experience based on personal

interests and preferences

WHY DON’T THEY TRUST US?Customers distrustful of TAs

VS

TAs resentful of level of transparency requested by

customers 

The more transparent TMCs are with customers about the supplier payments they

receive, the more trustworthy they are PERCEIVED to be.

ARE YOU AN EXPERT?Your credibility relies on your ability to apply travel

knowledge, experience, expertise and relationships with suppliers to consistently meet their customers’ expectations

and add value.

“Clients are modernising and the world has become global so they have access to a great deal of information. Travel

agents should be acutely aware that their client more often than not knows more

than they do.”

GOING THE EXTRA MILE?

Customers say travel agents lack passion

and purpose for their work and are not

concerned for making customers

requirements their main concern. They do not receive adequate industry or on-the-job

training.

Key TAKEAWAYS▪ Customers want to trust that

travel agents are truly representing their best interests.

▪ TMCs must be the operational subject matter experts in travel.

▪ Opportunity to build a positive, relationship with the traveller based on priorities.

▪ If TMCs could offer a good quality service, no need for a corporate travel manager separate from the normal procurement.

▪ Lack of professionalism and professional skills are a threat.

BECOME ASPECIALISTTo add tangible value to your customers…

CUSTOMERS WON’T PAYyou to be a travel order taker….

What'sNBtocorporates?

TrueConsulKng BeMer,detailedMISBeneficialSupplierRelaKonships TrendAnalysisFlexibilityofOBTs

“TMCs have to offer a combination of services, technology and other value

generators that will help the customer adhere to corporate travel policy,

manage risk, facilitate transactions, etc. You have to look at all the drivers as a

combination to define one value proposition.”

You can’t know everything about everywhere…

SPECIALISING

Key TAKEAWAYS▪ Customers unwilling to pay travel

order-takers.▪ Invest in and use tech to gather

customer, supplier and other data from multiple sources, analyse it and provide useful insights.

▪ Enhance your specialist knowledge so that it is more than what a traveller can find on the Internet.

▪ Take care of all logistical requirements, which if not seamless, risk negatively impacting the travel experience.

INVEST INEDUCATING & MOTIVATINGEmployees to become true consultants…

TRAVEL CONSULTANTSPerceived to be ill-equipped to be true

travel advisors due to the technical nature (only) of their qualifications,

inadequate skills training, lack of travel experience and a lack of real world or

virtual travel exposure.

Corporates say… ▪ TAs focus on quick handling of

transactional volumes ▪ Lack of dedicated travel

consultants to corporate customers

▪ High turnover of consultants▪ No educationals

TMCs exacerbate the problem because:

Why take a bus through THE GRAND CANYON

when you can RIDE IT ON A HARLEY.

What they need?

Dedicated team of “highly qualified customer service consultants” who would be available to help them and their travellers with bookings

and other concerns around the clock…

HaveBUSINESS-RELEVANT

Conversations

Translate requirements into internal service

delivery

Understand stakeholder context

Develop consultative selling skillsDevelop detailed destination and product knowledgeBe well travelled

Become Consultants!

Key TAKEAWAYS▪ Personnel recruited are ill-equipped

to be true travel advisors due to the nature of their qualifications, inadequate skills training, lack of travel experience.

▪ Travel consultants need to be empowered to consult and sell travel through skills development and opportunities to experience destinations and product.

MANAGESUPPLIER RELATIONSHIPSCarefully balance value proposition to customers with value to and from suppliers…

GOOD VALUE ENHANCING RELATIONSHIPS WITH SUPPLIERS ARE NB

Not easy…Agents distrustful of travel suppliers trying to

bypass themLots of competition for greater share of spend

Preferred deals lucrative and convenient, but limit product scope and flexibility of agents to meet

personalisation requirement.

Reframe your relationship

Agents must add differentiated and

demonstrable value to supplier product

Use credible suppliers

Suppliers must ensure TAs know the products they are selling and give access to better info

Key TAKEAWAYS▪ Develop strong supplier

relationships to deliver a valuable service to their customers.

▪ Acknowledge that customers are wary of the nature of the historical supplier relationships.

▪ Ad differentiated and demonstrable value to their suppliers’ product.

▪ Reframe relationship to find reciprocal economic benefits.

▪ Work with only credible wholesalers.

CHANGEREMUNERATION MODELTo focus on perceived value you add to customers…

CANT COMPETEOn price alone…

TAs must charge for the services they render, and the value added to customers…

“To compete effectively, Travel agents will have to differentiate themselves by using their travel expertise, knowledge and experience to do something that

their online competitors can’t do, namely provide a personal service that

meets the leisure traveller’s unique needs, interests and preferences."

Corporates don’t expect to receive a professional service for free and will allow TAs to retain a share of

value as long as they charge reasonable, fair and transparent price

for their services…ˀ

Corporates want you to disclose commissionsOther industries generate commissions

Why can’t we?...

Key TAKEAWAYS▪ TMCs need to charge for the

services they render, and will only be able to charge according to the value that their services add to their customers.

▪ It is fair for TMCs’ performance to be tied to agreed service levels in return for financial penalties and rewards.

▪ It is fair for TMCs to share the benefits they help generate for customers. 

EMBRACETECHNOLOGY-LED INNOVATIONTo disrupt practices no longer adding value to your businesses

Travel agents think they must compete with online

booking engines…

OMNI-CHANNEL APPROACHThe Connected Traveller will move from channel to channel, expecting the same offers, prices

and service whatever channel they choose throughout the traveller’s purchasing path –

before, during and after purchase.

Key TAKEAWAYS▪ Innovative technology enabled

options add value to travel agents’ business.

▪ Adopt an omni-channel strategy that delivers a personalised, 24/7 service experience from the start of the travel process to the end.

▪ Equip consultants with detailed product and destination information.

▪ Use data about your traveller to help personalise their leisure travel experience.

EMPLOYCOURAGEOUS, VISIONARY LEADERSTo take charge of the change needed to overcome your challenges.

Travel agency leaders need to take charge of and champion change to survive and compete effectively in the emerging industry landscape.

“Those travel agents that succeed will cope best with the complexity of their businesses today, while simultaneously changing their businesses to compete effectively for tomorrow’s customer in

tomorrow’s industry landscape.”

BE INSPIRATIONAL…Create a vision for a sustainable travel agency focused on meeting priority needs of customers. Use this vision to motivate for change that is based on a future opportunity that is better and that employees can be passionate about.

Key TAKEAWAYS▪ Travel leaders must champion

change to survive and compete effectively.

▪ Build a culture based on the values that most matter to your customer: care, trust, expertise.

The

QUESTIONS